Islamic Equity Funds roll down a slippery slope

April 3, 2019 (MLN): The Shariah Compliant Equity Funds market suffered largely at the hands of KMI – 30’s poor performance in March 2019, as the month steadily led each individual fund towards the red region while AKDISF suffered the brunt of damage.

As KMI – 30 index observed a 3% decline and all 17 shariah compliant equity funds followed its lead, 4 such funds went a few steps beyond the index’s decline and recorded over 3.4% decline in their respective Net Asset Values (NAV).

These funds include Al Meezan Investment Management Limited (3.5% decline), NBP Fund Management (3.9% decline), UBL Fund Managers (4.05% decline) and AKD Investment Management (5.1% decline).

Based on the statistics provided by Mettis Global Private Limited, AWT Investments (PRIMUSIEF) observed the smallest decline in its NAV, that of only 1.3% as it narrowed by Rs.1.23.

Following next on the list of least effected funds came JS Investments (JSISF) whose NAV came down by 1.9% or Rs.1.8 during the month.

The smallest absolute change in NAV was observed by MCB-Arif Habib Savings and Investment (MCBAHAISF), which also stands as the fund which incurred the third smallest loss in terms percentage. The fund lost Rs.0.2 of its NAV, a decline of 2% over the month.

A parallel look at the trend followed by KMI – 30 during the month justifies the decline in these funds’ performance, given that the index plummeted by 2,196 points.

The index closed the first day of March 2019 at 66,233 points while the last day of this month was concluded at 63,313 points.

As can be seen in the graph, the main substance of overall loss was witnessed in the first two weeks due to lack of positive triggers and the after effects of the tension with India which largely impacted the capital markets. The market participants of KMI – 30 went on a lasting selling spree during this time.

The index lost over 3,500 points, closing the 15^th day of trade at 62,724 points. From here onwards, the trade followed a rather sideways trend until the month ended.

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